Marcato Reveals in 13D It Has Amassed an Equal Stake to Third Point in Sotheby’s

Mick McGuire isn’t giving up easily in his fight to have Sotheby’s release $500m in capital as it previously indicated it would. He continues to pursue his lawsuit to get access to some of former lead director Steven Dodge’s correspondence. He filed a 13D to that effect on Monday as the company was announcing its new Chairman and CEO. More to the point, the 13D shows that Marcato has added to its BID position and now owns stock in three funds amounting to 9.53% or as much as his former ally Daniel Loeb’s Third Point:

The Third Point Opening Brief is now largely unredacted and contains extensive quotations and discussions of the board communications that were produced during the underlying litigation. Sotheby’s, however, seeks the continued confidential treatment of selected communications regarding perspectives on board members and board dynamics that outgoing lead director Steven B. Dodge shared with incoming lead director Domenico De Sole (the “Dodge Memorandum”) and with Audit Committee Chair Dennis Weibling (the “Weibling Email”). The redacted material goes to the very heart of the parties’ dispute in this litigation – the conduct and competence of Sotheby’s board of directors in adopting a poison pill. The public has a right of access to such information. In its Motion, Sotheby’s has failed to make any particularized showing of harm necessary to maintain confidentiality. Sotheby’s has accordingly failed to sustain its burden under Rule 5.1 and its Motion should be denied.

Sotheby’s efforts to establish good cause suggest only that disclosure of the board members’ perspectives regarding board dynamics may embarrass or damage relations between members of Sotheby’s board of directors, despite the fact that the sentiments reflected are largely those of a member – Mr. Dodge – who has long since left the board. Delaware law is clear, however, that the prospects of “embarrassment will not suffice for continued Confidential Treatment.”